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Hartford CEO Expects to Begin Share Buy-Back Soon

Source: WSJ - Erik Holm

Posted on 09 Dec 2011

Hartford Financial Services Group Inc. Chief Executive Liam McGee said the insurer expects to begin buying back shares soon and will complete its $500 million repurchase program early in next year's second quarter.

Hartford had announced the repurchase authorization in August, but volatile equity markets caused the company to delay its implementation. Some analysts had questioned whether the company would move ahead with the program, despite assurances from McGee and other executives that it would.

The buyback is the insurer's first since it was forced to accept a $3.4 billion federal rescue in the depths of the financial crisis. Hartford repaid for the rescue over a year ago, and doubled its dividend in February, but analysts had said the rising cost of hedging annuity obligations in Japan and the impact of falling stock markets could force the company to hold off on additional capital management activities.

At its annual investor day Thursday, McGee said, "We expect to begin repurchase activity in the near term" and expect to complete it "by early second-quarter 2012."

In an October presentation to investors, Hartford executives said they expected to complete the repurchase "in early 2012."

Slides prepared for the presentation show the company estimates 2012 core earnings will be $1.58 billion to $1.7 billion, or $3.30 to $3.60 a share. Analysts surveyed by Thomson Reuters had estimated the company would earn $3.51 a share.

McGee said Hartford is "focusing on growth where we can generate appropriate returns, prioritizing profitability over volume and ... driving greater efficiencies."

Still, he said the "slow-growth economy" and historically low interest rates are creating a drag and have masked some of the progress the company had made in recent years.